Senate Passes Online Sales Tax Bill

Deck:

The Marketplace Fairness Act of 2013, which would allow states to collect sales tax on purchases from big Internet retailers, moves through Senate by a vote of 69-27.

In a major victory for brick-and-mortar lighting showrooms across the country, Senate voted May 6th in favor of the “Marketplace Fairness Act of 2013[1],” which would allow states to collect sales tax on purchases from many online retailers like Amazon and eBay.

This new measure passed 69-27 and would enable states to collect sales tax from large Internet retailers (with sales of at least $1 million) that sell products to its residents. The current law only applies to retailers that have physical operations in states, which gives a pricing advantage to Internet retailers and has led to a trend dubbed “showrooming,” where consumers visit stores to scope out products and then purchase them online later for a lower price.

The bill now moves to the House, where conservatives are split on the issue. The Obama administration has endorsed the bill.

The American Lighting Assn.[2] (ALA) has been proactive in drumming up support for this bill and says its members have shown a great deal of interest, sending letters and answering calls to action.

“We want fairness in the marketplace and an equal playing field across all retailers,” says Eric Jacobson, ALA’s Vice President of Membership. “This is a great step forward but the House will be more challenging.”

According to a study by the National Conference of State Legislatures[3], states lost a total of $23 billion in 2012 because they couldn't collect taxes on out-of-state sales from the Internet and catalogs.